The airline industry experienced a turbulent day on Thursday as rising fuel prices and ongoing conflict in the Middle East created a complex landscape for carriers worldwide. While some Asian airlines saw a modest recovery due to tentative signs of resumed flights in the region, many U.S. and European carriers suffered losses amid escalating oil prices triggered by recent U.S.-Israeli military actions against Iran. This volatile situation has significantly disrupted global air travel, forcing governments to urgently coordinate evacuation flights for thousands of stranded citizens.
Most of the Middle East’s airspace remains closed due to the heightened risk of missile attacks, severely limiting flight operations across the region. Dubai International Airport, one of the world’s busiest aviation hubs, witnessed a remarkable increase in departures on Wednesday, more than doubling compared to previous days. This surge reflects a cautious but hopeful restart of air traffic after the conflict brought the airport to an almost complete halt. Nonetheless, overall flight activity is still far below typical levels, and experts warn that normalcy in global aviation could take considerable time to return given the ongoing tensions.
In addition to passenger flights, air cargo services have also suffered significant setbacks. The disruption has impacted the timely transport of perishable goods and critical aircraft components, creating ripple effects across various supply chains. Dubai Airports’ CEO, Paul Griffiths, acknowledged the unprecedented challenges faced over recent days in his first public statement since the airstrikes began. He emphasized the resilience and coordination of airport teams as they navigate this uncertain environment with determination and confidence.
The conflict’s impact on airline stocks has been uneven but generally negative. Azerbaijan, a crucial air corridor connecting Asia and Europe, temporarily shut down part of its airspace near the Iranian border following a drone strike in the southern Nakhchivan region. Despite this closure, flights continued in northern sectors, indicating partial operational continuity. Since the initial strikes last weekend, airline shares have been under pressure due to concerns over prolonged route closures and surging fuel costs. Jet fuel prices have reached record highs in Singapore, driven by fears of supply disruptions, further straining airline finances.
U.S. carriers, which have limited exposure to Middle Eastern routes, have avoided the extensive network shutdowns seen by Gulf-based airlines. However, the spike in fuel prices poses a significant threat to their profitability. Fuel expenses rank as the second-largest cost for U.S. airlines after labor, and many have reduced their hedging strategies, making them more vulnerable to sudden price increases. By midday Thursday, shares of major U.S. airlines including Southwest, American, Delta, United, and Alaska Air Group had fallen between 5% and 8%. European airlines also faced declines, with Air France KLM, Lufthansa, British Airways’ parent company IAG, and budget carrier Ryanair all slipping. Wizz Air experienced a sharp 9% drop after warning of a $58 million profit hit due to the conflict, though its CEO reassured that the financial impact would be confined to the current fiscal year ending this month, with the airline shifting capacity towards European routes.
Meanwhile, some Asian carriers showed resilience amid the turmoil. Cathay Pacific, Qantas, and Korean Air saw their stock prices rise, while Japan Airlines experienced a slight decline. Major Chinese airlines such as Air China, China Eastern, and China Southern faced moderate losses ranging from 1.5% to 4% in markets like Hong Kong and Shanghai. Senior economist Gary Ng highlighted the sensitivity of Asian airlines to the Iran conflict, noting the significant effects on flight routes, revenue streams, and operational costs.
In response to the crisis, Emirates and Etihad have resumed limited flight operations from Dubai and Abu Dhabi, utilizing designated safe air corridors to ensure passenger safety. Emirates announced plans for over 100 departures carrying both passengers and cargo on Thursday and Friday, signaling a gradual restoration of services. Qatar Airways also initiated relief flights starting Thursday, operating from Muscat in Oman to several European cities including London, Berlin, and Rome, as well as from Riyadh to Frankfurt, to assist stranded travelers.
Governments across North America and Europe have mobilized efforts to repatriate their citizens through chartered flights and reserved seats on commercial airlines. Since February 28, more than 17,500 Americans have successfully returned home amid the escalating conflict. A recent flight carrying Kenyan nationals and other evacuees arrived in Nairobi on Thursday, including a group of 13 children and their teachers who had been caught in the turmoil during a school trip to the Gulf. The school director, Olive Tindika, described the harrowing experience, recalling how the children were traumatized by daily alerts and explosions lighting up the sky. She shared how the children would arrive at their hotel in tears, underscoring the emotional toll of the ordeal.
